I. Definition of Unemployment
II. Classification Types of Unemployment
III. Measurement of Unemployment
IV. Economic Effects of Unemployment
• Social Costs
• Government Costs
V. Policies Designed to Correct Unemployment
McConnell, Brue, and Flynn (1960, p. 117) define unemployment as the state a person is in if he or she cannot get a job despite being willing to work and actively seeking work. Many have debated the authenticity of this definition labeling its measurement too restrictive. They feel that additional questions arise as to why unemployment exists. Are they really looking for work? Are they skilled or unskilled? How long have they been unemployed? Therefore, it becomes necessary to analyze the various types of unemployment when comparing the merits of each theory.
The four types of unemployment are frictional, seasonal, structural, and cyclical. Funk & Wagnalls’ New World Encyclopedia defines the various types of unemployment as listed below:
Frictional unemployment arises when workers seeking jobs do not find them immediately; while looking for work they are counted as unemployed.
Seasonal unemployment occurs when industries have a
slow season, such as construction and other outdoor work in winter.
Structural unemployment arises from an imbalance between the kind of workers wanted by employers and the kinds of workers looking for jobs.
Cyclical unemployment results from a general lack of demand or labor.
The definition for frictional unemployment explains why it is unlikely that there would ever be 100% employment. This would account for people switching jobs, taking temporary layoffs due to illness or pregnancy, and those foregoing work to seek higher education/training. The person working as Santa during Christmas would become...